Deadlines set for required ‘Exchange Notices’
By Jim Prince
Under the Patient Protection and Affordable Care Act (PPACA), also known as “Obamacare,” employers are required to distribute information to employees about the health insurance exchanges that will become effective in 2014. These notices were originally required to be distributed by March 1, 2013. However, in January 2013, the U.S. Department of Labor (DOL) delayed this distribution requirement pending further notice. On May 8, 2013, the DOL provided model notices and set an October 1, 2013, deadline for distributing them. We refer to the notices as the “Exchange Notices.”
Employers subject to the notice requirement
The Exchange Notice requirement applies to all employers covered by the Fair Labor Standards Act (FLSA), which includes almost all private sector employers and many public sector employers as well. The DOL has an online tool to use to determine whether the FLSA applies.
The requirement to provide an Exchange Notice applies regardless of the number of employees and regardless of whether or not the employer offers health insurance coverage to its employees.
Persons entitled to Notice
All employees must receive the Exchange Notice, regardless of whether the employer sponsors a health plan and regardless of whether they are enrolled in the plan. Separate Exchange Notices are not required to be sent to dependents or former employees, regardless of whether they are still covered by or eligible for coverage under the plan (e.g., pursuant to COBRA or retiree coverage).
Content of the Exchange Notice
The use of the DOL’s model notices will satisfy the PPACA notice requirement. Separate model notices are provided for employers who sponsor plans versus employers who do not sponsor plans.
Employers who sponsor a health plan will use Notice A and will need to complete the information on the second and third pages of Notice A. This will require an employer to determine each employee’s eligibility, the premium that the employee will pay, and whether the coverage offered meets the “minimum value” requirements under PPACA.
Employers who do not sponsor a plan will use Notice B and will need to complete the second page.
Employees who are on the payroll on or before September 30, 2013, must receive an Exchange Notice by October 1, 2013. New employees hired on or after October 1, 2013, must be provided with a copy of the Exchange Notice within 14 days of the date of hire. This 14-day period is in effect from October 1, 2013, through 2014 and may be changed in the future.
The Exchange Notice may be delivered by first-class mail or electronically in accordance with the DOL’s electronic delivery requirements.